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Use the 10-year Treasury Bond rate as the risk free rate and assume that the market risk premium is 8% to find Ciscos cost of
Use the 10-year Treasury Bond rate as the risk free rate and assume that the market risk premium is 8% to find Ciscos cost of equity. Assume that Ciscos bonds are rated AAA and that Ciscos corporate tax rate is 21%. Assume that Ciscos bonds have no floatation costs, but the cost of issuing equity is 4.t%. Find Ciscos weighted average cost of capital. Assume that the project will be financed with internal funds.
4.t% should be 4.5%.
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